Sales for Engineers

The stereotypical "sales professional" is often seen to be a supreme manipulator with no scruples. You know, kind of a badly dressed, cartoonish fellow, trying to scam you at a used car lot.

In reality, it's a little unfair to lay blame solely on sales for the reputation that they sometimes have without involving marketing. So part of a marketing strategy revolves around customer retention.

Increased profitability due to customer retention happens because once a relationship has been established with a customer, benefits can accrue, as follows:

Acquisition cost occurs only at the beginning of a relationship -- longer relationships lower the amortized cost.

Account maintenance costs decline as a percentage of total costs.

Long-term customers tend not to switch to another supplier or solution. They also tend to be less price sensitive, thereby making stable unit sales volume and increases in dollar-sales volume.

Long-term customers promote by word-of-mouth referrals, are more likely to purchase related products, and tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.

Long-term customers are less expensive to service and require less education.

Many of these benefits accrue directly to the sales force and sales support staff, but all of this does require an investment in all aspects of the marketing-sales process and -- controversially -- in the customer themselves.

Not all companies will embrace taking a long-term view of sales, and some should not take the long view. Which companies won't benefit from customer lifetime value? Primarily "one-shot" businesses that do not want, or need, to build a long-term relationship. For example, people who bought pet rocks when that fad hit the market in 1975 did not buy much else promoted to them. The novelty was what they were buying. For most of us, however, if one works in anything from a retail clothing company to a high-tech company, one will always benefit from working to retain customers.

There's been a surge in the popularity of getting rid of your problematic customers. For one company, a problem customer may be the rude person on the phone, a delinquent payer, someone who whines about perceived imperfections, or most any reason that a person might make up to stop dealing with someone. Choosing to "fire a customer" needs to be done carefully and selectively. This is one thing that I disagree with from the experts who advocate this tactic. Terminating a customer relationship because a product is being discontinued or sold to another company is one of a handful of legitimate reasons to "fire a customer." Of course, there are always the people who you cannot satisfy regardless of what you do. Terminating this type of relationship is tricky -- they have friends and they will talk trash about you and your company.

Some years ago before the Internet had really become accessible to the general population, I saw a customer complaint about a product that I managed. The original email went to perhaps a half dozen people. But those people told their friends, who told their friends... In the end, over 1,000 people had been copied on the original complaint. The complaint was easy to deal with, and we did so quickly and successfully. Firing the original poster as a customer would have left a bad view of the company and its product. Answering the complaint turned most of the 1,000 people into supporters, so the moral of this story is "Find every opportunity to retain customers and turn detractors into raving fans."

How about you? Do you have any customer- and/or sales-related stories you would care to share?

It is usually hard to find sales or financial insight on tech sites. Most of us know or feel how a sale is made but have never done in practice. All we see are people in suits who know nothing about a product but still make people comfortable in buying the products.

@wilber_xbox It's really too bad that there isn't more information presented in tech venues about other non-engineerig disciplines. "Suits" is often used as a derrogatory name for managers, sales, and marketing. But there's a real reason for sales professionals to wear suits: it's a sign of respect for the customer - both engineers AND management.

I suppose that the principles that are listed in this week's blog are "ethical manipulation." But unethical manipulation is entirely possible and are the subject of an upcoming blog.

In our profession, the sales people are often engineers too, and the best ones know their products very well. Don't forget, without them, managers, design engineers, test engineers, applications engineers and everyone in manufacturing would cease to be neccessary.

Have you been to an electronics trade show lately? Most of the people in a booth wear polo shirts with the company logo. If you wear a tie, people think of you in the same light as a used car salesman and they don't trust you as much.

As @AZ ponts out, people sessing electronic components and equipment ot enginers do know more about the products they sell that many others. Yes, that's because many of them started out as engineers. I know a number or college classmate who all have engineering dregrees and went into selling electronics pars and equipment.

Henry, many others who are not sale people are now judged by the numbers. We editors are certainly in that box. As I'm sure you know, web sites generate a mountain of statistics that are often pointed back to editors. When I started in this business, my outlet was all print and there wre virtualy no stats to judge the effectivemenss of an article. Today, we have stats on everything.

"If you wear a tie, people think of you in the same light as a used car salesman and they don't trust you as much."

I think it depends on the circumstances and the issue is more a question of overdressing for the situation. But as a general rule, a guy in a suit & tie doesn't come across as a guy who will join you at the lab bench to help debug a problem you're having with one of his products. You tend to think of him more as the guy who will be in a conference room with your managers, doing the Powerpoint dog & pony show. Not that you don't trust a guy in a suit & tie, but when you're under pressure to solve that problem in the lab, you're looking for suit guy's co-worker who's wearing the polo shirt.

@MeasurementBlues You're right that the electronics trade show uniform is pretty universally slacks and a polo shirt. And many trade show booths are staffed by factory applications and engineering folks. But a central reason for the trade show uniform can be found in the graphics design of the booth - and a corporate identity. Years ago the issue of booth attire was pretty significant - the polo or botton down shirt hadn't yet become accepted. The maneuvering for styles and color was "awesome" to watch.

Most sales folks that I see every week wear a suit - perhaps without a tie in many circumstances. There also tends to be regional differences in business attire. But, the smart sales person carries a tie (if a male) and knows their audience.

BUT, when I have an engineering problem, I don't ask a sales person to help me solve it (unless I know them personalloy and know their skills). I call on the Field Apps Engineer or the factory apps team.

Skills are definitely different for apps engineering and sales. When I want to talk first level product details I count on the sales person to give me the overview. When I have a bench problem I really want an apps engineer to come help.

@MeasurementBlues you're right on the money when it comes to all categories of professionals and measurement numbers!

Thirty years ago we had only secondary measures of cause qnd effect. Now we can get a lot closer to a causal relationship. It still isn't easy - designing meaningful measures isn't always getting the data that's needed.

I'm a bit conflicted on the topic of instant measures. I like the reality of reducing the feedback cycle, but I've seen too many "suits" misunderstanding data and drawing the wrong conclusions. It CAN get better, but it takes sophistication on the part of management.